Hollywood's contract war goes to court Disney chiefs' court battle open to public

HOLLYWOOD LICKED its lips yesterday at the prospect of a public showdown between two of its biggest moguls, Disney chief Michael Eisner and his former studio chairman Jeffrey Katzenberg, after a superior court judge ruled that a lawsuit to determine the size of Mr Katzenberg's severance package should be opened to the media.

The judge, John Ouderkirk, made his ruling after an approach by several media organisations, including the entertainment industry bible, Daily Variety. He rejected Disney's arguments that there was a risk of sensitive documents leaking into the public arena, although he gave the company the chance to press for the withholding of individual items.

Unless the long-running legal saga can be settled out of court, there is every prospect of Mssrs Eisner and Katzenberg venting their bile at each other in open session. The court hearing, which started yesterday and is due to move to opening statements on Monday, is likely to delve into such details as the fine print of Mr Katzenberg's contract, his relations with Mr Eisner and other senior Disney executives, and allegations that he was the victim of fraud.

Between them, Mr Eisner and Mr Katzenberg resurrected Disney from a moribund cartoon company into a global media conglomerate with interests in everything from cable sports channels to theme parks. They also produced a string of animation hits including Beauty and the Beast, Aladdin, and The Lion King.

But there has been little love lost between the two men since Mr Katzenberg walked out of Disney five years ago to set up the DreamWorks film studio with Steven Spielberg and the music business guru David Geffen. Mr Eisner triggered the feud by refusing to offer Mr Katzenberg a promotion; now Mr Katzenberg says he is owed 2 per cent of the profits of every venture in which he was involved - a sum estimated to be at least $250m (pounds 155m) and rising with every sale.

The friction between the two was renewed last year when Disney and DreamWorks animations about insects - A Bug's Life and Antz respectively. Mr Katzenberg was publicly accused of stealing the idea and then making sure his version made it into cinemas first. He denied the allegation.

The lawsuit has been running for almost three years. Disney conceded in 1997 that it owed Mr Katzenberg something; this next stage is to determine exactly how much.